Published in Economic Development
John Dillworth, President and CEO of Goodwill Industries of Southwest Michigan John Dillworth, President and CEO of Goodwill Industries of Southwest Michigan Photo by Jane Simons

Tax changes ‘a great big wild card’ for Goodwill of Southwest Michigan

BY Sunday, December 24, 2017 06:19pm

John Dillworth spent much of his career at Kellogg Co. in various positions, including sales, strategic planning, I.T., budget management, customer service, and others. Since 2000, he’s served as president and CEO of Goodwill Industries of Southwest Michigan. He talked about the state of the nonprofit sector looking ahead to 2018.

What will be the biggest challenges for Goodwill in 2018?

The economy is scary good and it’s planning for the scenario that whatever goes up always comes down, at least a little bit. I’m not sure how all that’s going to work. We are trying to be aware of what might happen in our environment and we’re trying to adapt. We’ve placed (fewer) people this past year than ever before, but that’s because everyone who wants a job can find a job. If you breathe and you show up, you’ve got a job. But, if the economy changes we want to be prepared.

Given the volatile political climate, what are your biggest concerns going into 2018?

Pending changes to taxes are going to impact all nonprofits. … We have heard that this bill … could just wipe out all the help given to people with disabilities. We contract with other agencies to figure out careers for people. If you take away all of the federal money for that, it will impact us. When you look at a $1.5 trillion scenario, if they don’t get the revenue forecasted, then they start cutting. It could be a very scary 2018 or it could not be.

What trends are you seeing in demands for your services at Goodwill? 

Over 3,500 folks are served annually in Southwestern Michigan by us. They come from referrals from other agencies. People come to us for simple things like gas cards and clothing and about 2,500 are folks getting that one-off (service). We have seen an increase in in-depth users, which includes families in our Life Guides program that we started five years ago to get people out of poverty and become self-sufficient. One-third of the families who started in the program no longer need it. There’s a lot of talk about poverty reduction and this program seems to be working. 

What brings people in need of your services to Goodwill?

Agencies will tell individuals that Goodwill can help them. We get referrals from organizations including Michigan Rehabilitation Services and the Michigan Commission for Blind. Our Life Guides program gets referrals from the Kalamazoo Public Schools. If you’re coming here, there’s some self-motivation to do that. They’re looking to make a change and do things differently.

Given the challenges at the retail level, how sustainable is your revenue stream? 

The stores are about 83 percent of our revenue base, contract manufacturing is 9 percent, and our mission is 8 percent. We get very little in monetary contributions. We get funding from foundations to run about 8 percent of our mission programs. … Our rural stores did well, but our city stores in general had a tough time. It was an adjustment. We doubled down on customer service and had a great rest of the year. 

From a sustainability point of view, the ISO certification and some of the processes we put in place for contract manufacturing helps us be more competitive for folks who have things that are troublesome for them to do. Within the next 10 years, we expect to see an increase in donations because baby boomers have a lot of stuff and millennials don’t want it.

What support services do you offer to your clients and how have they changed over the years?

What we do now that we didn’t do six years ago because we’re not in a federal or state system is we can adapt to the needs of each person. That makes us different from just about anyone else out there. In a perfect world, all nonprofits would want to do that. One size doesn’t fit all and we can’t afford to leave anyone behind anymore. Today, everyone needs a strong, solid education to succeed. If things aren’t working, you need to look at what you’re doing. We’re set up functionally to do that.

What keeps you awake at night in terms of issues at Goodwill?

A minimum wage increase and changes to the tax laws, which is a great big wild card. We continue to grow and with growth can come bureaucracy. We don’t know if we’ll get hurt with donations. Everyone itemizes and we anticipate a lot of donations between Christmas and New Year’s with everyone wanting to get a tax deduction one last time. We will be buried in donations and then it’s going to be ‘who turned out the lights.’ We also are trying to find people who are self-starters. There’s more of a demand for them than there is supply right now. 

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